Ardelyx Q4 2024 Earnings Report

Ardelyx EPS Results

• Actual EPS: $0.02
• Consensus EPS: $0.02
• Beat/Miss: Met Expectations
• One Year Ago EPS: N/A

Ardelyx Revenue Results

• Actual Revenue: $116.13 million
• Expected Revenue: $111.16 million
• Beat/Miss: Beat by +$4.97 million
• YoY Revenue Growth: N/A

Ardelyx Announcement Details

• Quarter: Q4 2024
• Date: 2/20/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, February 20, 2025
• Conference Call Time: 8:00AM ET

Ardelyx (NASDAQ:ARDX), a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company's lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.

Ardelyx Q4 2024 Earnings Call Transcript

Key Takeaways

• IBZRLLA delivered 32% quarter-over-quarter growth in Q4 driven by the completion of its sales force expansion, improved gross-to-net deductions and plans to boost omni-channel marketing and direct-to-patient outreach.
• EXPOSA’s launch generated $57.2 million in Q4 net sales (up 11% QoQ) and, despite Medicare Part D delisting, Ardellix is ensuring patient access via its Ardellix Assist specialty pharmacy and a patient assistance program, aiming for $750 million peak sales.
• For FY 2024, Ardellix reported total revenues of $333.6 million (vs. $124.5 million in 2023), Q4 net income of $4.6 million (versus a prior-year loss), and ended the year with a robust $250.1 million in cash and short-term investments.
• 2025 guidance includes IBZRLLA net product sales of $240–250 million, gross-to-net deductions around 30%±5%, SG&A spending up by ~$10 million per quarter, and continued expectations of >$1 billion peak sales pre-patent expiry.
• Ardellix’s corporate development team is actively building a robust pipeline through internal R&D and external licensing to leverage the company’s proven development, regulatory and commercial capabilities.

Presentation

[Operator]

Welcome to the Ardellix Fourth Quarter and Fiscal Year twenty twenty four Earnings Call. All participants will be in listen only mode. I would now like to turn the conference over to Caitlin Lowy, Vice President of Corporate Communications and Investor Relations. Caitlin, you may begin.

[Caitlin Lowie, Vice President, Corporate Communications and Investor Relations at Ardelyx]

Thank you. Good morning and welcome to our fourth quarter and full year twenty twenty four financial results call. During this call, we will refer to the press release issued earlier today, which is available on the Investors section of the company's website at ardelix.com. During this call, we will be making forward looking statements that are subject to risks and uncertainties. Our actual results may differ significantly from those described.

[Caitlin Lowie, Vice President, Corporate Communications and Investor Relations at Ardelyx]

We encourage you to review the risk factors in our most recent annual report on Form 10 ks that was filed today and can be found on our website at ardellix.com. While we may elect to update these forward looking statements in the future, we specifically disclaim any obligation to do so even if our views change. Our President and CEO, Mike Raub, will begin today's call with opening remarks and an overview of the company's progress during the fourth quarter of twenty twenty four. Next, Eric Foster, Chief Commercial Officer, will provide an update on the performance of Azrela and Exposa. Justin Renz, Chief Financial and Operations Officer will conclude today's prepared remarks with a review of the company's financial performance during the fourth quarter and full year ended 12/31/2024 before we open the call to questions.

[Caitlin Lowie, Vice President, Corporate Communications and Investor Relations at Ardelyx]

With that, let me pass the call over to Mike.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Thank you, Caitlin, and good morning, everyone. I'm pleased to be here today to discuss our fourth quarter and full year 2024 performance. In the past year, our team's dedication to outstanding commercial execution led to numerous significant achievements. INZRELA's growth continued throughout 2024 with an acceleration in the fourth quarter as we began to see the positive impact of our expanded sales team. It is evident that patients are benefiting from ISURELLA as this important medication provides rapid and lasting relief from the symptoms of IVF C, which can significantly disrupt patients' lives.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

For EXPOSA, our team successfully executed one of the best product launches in recent years. In the first year of sales, we demonstrated that EXPOSA is a crucial medication for dialysis patients, enabling them to achieve and maintain target phosphorus levels. In the midst of this outstanding performance, we confidently tackle the challenging reimbursement environment. Our commitment to prioritizing patient needs has never wavered. We've taken strong decisive actions and we're dedicated to ensuring that patients continue to have access to EXPOSA as they always have regardless of the coverage changes made by CMS.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Our commitment to protecting patient access guarantees that at a minimum we will continue to serve dialysis patients as we aim to grow the EXFOZA business to at least $750,000,000 before patent

[Mike Raab, President and Chief Executive Officer at Ardelyx]

expiry. Building on

[Mike Raab, President and Chief Executive Officer at Ardelyx]

the impressive performance both as well as ExFOZA, we successfully reinforced our cash reserves, finishing 2024 with a strong cash position paving the way for future growth. These accomplishments establish the foundation for our growth in 2025 and beyond and we're poised to execute our strategic priorities with determination firmly anchored in our commitment to commercial excellence. Israel's growth momentum is continuing as the commercial team builds clinical conviction among prescribers, which alongside our exceptional patient services team ensures the prescriptions are filled and reach patients. ISRELA is an outstanding product and patients deserve access to this treatment and the benefit it provides. Despite the coverage changes the CKD community is navigating, preliminary evidence clearly indicates that our exposure strategy is effective and that patients across all access paths are successfully receiving treatment.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

We're extremely proud of our team's performance and the strong initial indicators we are observing which Eric will share with you momentarily. Our exceptional commercial execution has demonstrated our ability to establish a sustainable and resilient company. Our corporate development team is focused on building robust pipeline and are actively identifying and evaluating a range of internal and external opportunities. Their efforts leverage our proven strength in development, regulatory affairs and commercial excellence to drive our next phase of growth. Our focus on serving our patients and driving exceptional commercial and financial performance is at the core of who we are and what we do.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

We're extremely proud to generate over $330,000,000 in revenue last year and finished the year with a robust $215,000,000 on our balance sheet. This strong financial position empowers us as we build our company for the future. Rest assured, we will be diligent stewards of our capital, strategically investing in areas where we have confidence in our ability to generate significant value for shareholders. We are building an exceptional company, one that stands out in the industry. Our future is incredibly promising and we are poised for great success.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

I will now hand the call to Eric to share an update on our commercial performance. Eric?

[Eric Foster, CCO at Ardelyx]

Thank you, Mike. It's great to be with you all again. Across our portfolio, we had a great fourth quarter driven by strong demand from prescribers for these two first in class medicines that are demonstrating the clinical benefits they can offer patients. Every day, we hear success stories of patients with IBSC whose quality of life has improved thanks to Opterola or CKD patients who have struggled for years to achieve target phosphorus levels are now coming into range, thanks to EXFOZA. We had a strong momentum throughout 2024 and will look to maintain that momentum in 2025 with strategic investments in areas where we believe we can drive further demand and share.

[Eric Foster, CCO at Ardelyx]

Let me start with IBZRILLA. We reported an incredibly strong quarter with more than 32% growth quarter over quarter from Q3. We completed our sales force expansion at the end of Q3 and they were trained and in the field for all of Q4 driving that accelerated growth. Importantly, we saw growth from all our key indicators in the fourth quarter including new and repeat writers and new and refill prescriptions. We particularly saw a notable increase in the growth of new writers.

[Eric Foster, CCO at Ardelyx]

We are pleased to see that because it aligns with the expanded targeting that we implemented with the growth of our sales team. Not only is the team focused on high riding gastroenterologists, but we've been able to expand the number of high riding non GIs as well as a number of advanced practice providers or APPs, which includes nurse practitioners or PAs who are heavily involved in IBS C management for patients. We're excited about the exit trajectory coming into 2025. And as we look to maintain the momentum, we're focused on maximizing our pull through across the patient journey. Starting with the top of the funnel, our sales team will continue to focus on driving clinical conviction and patient identification among our expanded HCP list.

[Eric Foster, CCO at Ardelyx]

At the same time, we are thoughtfully increasing our investments in omni channel communication to engage and drive action among prescribers and patients. Initially, our marketing efforts focused on the prescribers and we saw early on that they were highly responsive to Apsirella safety and efficacy profile and our marketing messages. We have also learned that IBSC patients are incredibly engaged seeking new information and connecting with patients alike, while also exploring options to manage their condition. We will be increasing our investment in direct to patient communication in 2025 to empower patients to learn more about their condition and the different options to treat their symptoms of IBS C. At the same time that we are driving more patients at the top of the funnel, we will be increasing our focus on pulling those patients through to the bottom of the funnel, so more patients can access Ypsrela.

[Eric Foster, CCO at Ardelyx]

We've got an incredible patient services program with Ardellix Assist and it performed phenomenally in the fourth quarter. We believe that we can do more. And so in 2025, we'll be investing in our patient services programs and notably expanding our access manager team. This is a field based team that is part of our Deleks Assist that will focus on pulling through those appropriately identified patients. This team will work with physician offices to help understand the process for prior authorizations and make sure that barriers are addressed so patients can have access to our medicines.

[Eric Foster, CCO at Ardelyx]

We have always had pull through rates that are in line with our industry. However, we recognize that we can do more and we have the unique ability to address this opportunity because of the Ardellix Assist program that helps connect healthcare providers, pharmacies, patients and payers. I'm excited about the incredible potential that Absrella has to help many more patients with IBS C and the continued growth we expect in 2025. Moving on to EXPOSA. The performance that we delivered in 2024 demonstrates just how important this medicine is for patients.

[Eric Foster, CCO at Ardelyx]

EXPOSA's differentiated mechanism of action and strong safety and efficacy profile were attractive to prescribing physicians since launch in late twenty twenty three. But the real world experience that physicians have with EXPOSA demonstrates the significant impact that it can have. More patients are now able to achieve target phosphorous levels, thanks to the addition of EXPOSA to their treatment regimen for hyperphosphatemia, an innovation that came nearly fifty years after the introduction of phosphate binders. We recognize that the question everyone is asking is what is going to happen to EXPOSA in 2025. This is what we know today.

[Eric Foster, CCO at Ardelyx]

First and most importantly, dialysis patients who are in need of EXPOSA to lower their serum phosphorus levels have access to treatment. Today, EXPOSA is available as it always has been as a prescription written by a healthcare provider. The only thing that has changed is that EXPOSA is no longer covered by Medicare Part D. Second, our commercial approach is unchanged from last year. As with Ypsrela, our EXPOSA team is focused on driving clinical conviction and patient identification and pulling prescriptions through to the patient.

[Eric Foster, CCO at Ardelyx]

At the same time, they're helping the nephrology community and care teams to understand that their ability to prescribe EXPOSA remains unchanged and that for the best experience, prescriptions should be sent to the Ardellix Assist specialty pharmacy. Most importantly, we do not want physicians to change their prescribing habits based on patient coverage. Our message is to prescribe as you always have based on the patient need and we will adjudicate patient access and affordability on our end. That directive will ultimately support our long term growth expectations. For us, insurance ensuring patients have access to therapies is both a moral obligation and a strategic opportunity.

[Eric Foster, CCO at Ardelyx]

We have seen the benefit that EXPOSA offers and we are fortunate that the business we've structured and the approach that we have taken allows us to ensure access to our medicines regardless of payer. With this approach, we are confident that we can deliver significant growth on our path to $750,000,000 at peak. It is too early for us to share any meaningful commentary on the first quarter, but I can share a few thoughts. The first thing that I look for when we entered January was if our processes were operating as planned and there are four key patient paths that we have been monitoring. First is an existing patient who was covered by Medicare still on therapy through our patient assistance program in 2025 if they qualify.

[Eric Foster, CCO at Ardelyx]

Second, is an existing non Medicare patient still receiving a revenue generating script. Third, is a new qualifying Medicare patient able to access EXPLOSA through our patient assistance program? And fourth, is a new non Medicare patient receiving a revenue generating script? The answer in all four of these scenarios is yes. So the systems and processes that we put in place in anticipation of this change are working as designed.

[Eric Foster, CCO at Ardelyx]

At this point, we're staying very close to all the stakeholders to quickly learn and address any concerns that may arise. We are connecting with prescribers to every avenue we can to reinforce our message that the access path for EXPOSA is unchanged. Our early indicators are in line with our expectations and we'll share more in the months ahead as we have additional data available. I have a tremendous amount of confidence in our team's ability to deliver on our priorities for this year. They are focused, empowered and a high performing team.

[Eric Foster, CCO at Ardelyx]

We are investing across the commercial organization to strengthen our position in the market, support patients along their journey and accelerate our growth momentum in the years ahead. I will now turn it over to Justin. Justin?

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

Thank you, Eric. Earlier in January, we announced our product revenue and cash position. So I'll use this as an opportunity to review that material and highlight additional key financials from both the fourth quarter and full year 2024, as well as offer some thoughts on 2025. We had total revenues of $116,100,000 in the fourth quarter of twenty twenty four, driven by growth in product sales. On a full year basis, we reported total revenues of $333,600,000 in 2024 compared to $124,500,000 in the prior year.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

Our performance was driven by strong year over year growth for IBZRILLA and the exceptional launch of EXPOSA. During the fourth quarter of twenty twenty four, we recorded IBZRILLA net product sales revenue of $53,800,000 nearly double the same period of 2023 and an increase of over 32% quarter over quarter from Q3. Our growth was driven by several factors including strong patient demand, the completion of our field based sales team expansion and an improvement in our gross to net deduction, which was 28.5% for the fourth quarter. On an annual basis, we recorded $158,300,000 of IBZRLLA net product sales revenue in 2024 compared to $80,100,000 in the prior year. We also recorded $57,200,000 in net product sales revenue of EXPOSA in the fourth quarter, an increase of 11% over Q3, driven by continued demand for its first in class medicine.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

Our gross to net deduction remained consistent at 20.3% for the fourth quarter. On an annual basis, we recorded $160,900,000 of U. S. Net exposive sales in 2024 compared to $2,500,000 during a partial fourth quarter of twenty twenty three following launch. In addition to product revenue, we also had $4,200,000 in product supply and licensing revenue in the fourth quarter and $11,700,000 for the full year 2024 compared to $3,800,000 during the fourth quarter and $41,900,000 for the full year of 2023.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

As a reminder, we received non recurring regulatory milestone payments from our collaboration partners in the fourth quarter of last year. We also recorded just over $900,000 in non cash royalty revenue during the fourth quarter of twenty twenty four and $2,700,000 for the full year 2024. Research and development expenses were $13,700,000 for the fourth quarter of twenty twenty four compared to $9,500,000 for the same quarter of the prior year. In 2024 and 2023, R and D expenses were $52,300,000 and $35,500,000 respectively. The increase in R and D expenses reflects increased medical engagement with scientific communities and pediatric clinical trial activities.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

Selling, general and administrative expenses were $76,100,000 for the fourth quarter of twenty twenty four compared to $47,800,000 that we reported for the same period in the prior year. On a full year basis, total SG and A expenses were $258,700,000 compared to $134,400,000 in 2023. The increase was related to commercial activities for Absrela and Xposa including the aforementioned sales force expansion as well as growth of the overall corporate infrastructure to support our strategy. We had net income of approximately $4,600,000 or $0.02 per share in the fourth quarter of twenty twenty four compared to a net loss of $28,800,000 or $0.12 per share in the same period of the prior year. The net income for the fourth quarter of twenty twenty four included $10,800,000 in combined non cash expenses from share based compensation and net non cash expense related to the monetization of hyperphosphatemia sales royalties in Japan.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

Our net loss for the full year 2024 was $39,100,000 or $0.17 per share, which included $41,800,000 for non cash expenses from share based compensation and net non cash expense related to the monetization of hyperphosphatemia sales royalties in Japan. As of 12/31/2024, our total cash, cash equivalents and short term investments increased to $250,100,000 as compared to $184,300,000

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

at the end of twenty twenty three.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

This includes $49,700,000 in net proceeds that we drew in October from our term loan agreement with SLR Capital as well as operating cash flows generated during the second half of the year. Before I close, I want to share some of our financial expectations for 2025 and beyond. From a revenue perspective, we anticipate continued long term growth for both Ypsrela and XFOSA. We continue to expect EBSRLLA to achieve greater than $1,000,000,000 in net product sales annually prior to patent expiry. As we announced in January, we expect to deliver between $240,000,000 and $250,000,000 in net product sales revenue for Ambarella in 2025, driven by our expanded sales force as well as investments in patient pull through in our omni channel communications efforts.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

We also expect our gross to net deduction to follow a similar trend that we have seen over the past two years being 30% plus or minus 5% and less favorable in the first quarter and more favorable by the fourth quarter. As it relates to EXFOZA, as you have heard from Mike and Eric, we continue to have a significant expectation for EXPOSA driven by the clear unmet need for CKD patients to have another option to lower their serum phosphorus target levels. We expect that EXPOSA will achieve $750,000,000 in annual net sales revenue prior to patent expiry. As I think we have demonstrated in the past, we provide guidance that is thoughtful and reflects our expectations of the business. We also only give information we feel that we are in a position to give an accurate view.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

As such, we will not be sharing 2025 Exposa revenue guidance at this time. One thing I can share is that we expect Exposa's gross debt deduction in 2025 to be less favorable than we saw in 2024 due to the change in our payer mix. We will also be increasing our SG and A expense by approximately $10,000,000 per quarter in 2025 as compared to the fourth quarter of twenty twenty four's run rate to grow both INTELLA and EXPOSA. Those investments include the additional market access team members and the omni channel communications that Eric spoke to as well as increased costs associated with our patient assistance program following the elimination of Medicare Part D coverage for EXOSA. You should note that our royalty obligation payable to AstraZeneca is expected to be fully satisfied in 2025, which should generate some gross margin favorability in the second half of this year.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

We are excited to be making these investments to grow our business and we will do so based on our strong cash position of over $250,000,000 We feel very confident we are in a position to fund our expected operations from our current cash position. We are building a great company and expect to create significant shareholder value this year by delivering on our key strategic priorities. With that, I'll hand it back to Mike.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Thanks, Justin. Since our founding in 02/2007, every year no matter the challenges we've encountered has made us better and more resolute in our mission. 2024 was an incredible year for Aradelix and the patients we serve are benefiting from our medicines. We protected patient access to EXFOZA, we doubled down on our commitment to IVFC patients with ISRALLA, we strengthened our financial foundation to ensure future growth and most importantly, we never deviated from our values. The path ahead is clear and filled with promise.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

We are fully committed to our priorities, driving Azrela's growth, executing on the exposure strategy, building a pipeline of impactful medicines and achieving strong financial and commercial performance. I'm truly excited about our future and we'll keep you informed about our progress in the quarters ahead. I will now open the call to questions. Operator?

[Operator]

And our first question comes from Yigal at Citigroup.

[Yigal Nochomovitz, Director at Citigroup]

Great. Thank you very much. So my question relates to the New Zealand guidance. So 2.4% to 2.5% if you do the math, I mean it seems quite conservative about 5% quarter on quarter growth at the midpoint. I mean, I can understand the low end being conservative, but the high end, I mean, even if you were to assume modest decrease versus what you saw in 4Q twenty twenty four, the 32%, it seems like the upper end of the guidance could be quite a bit higher.

[Yigal Nochomovitz, Director at Citigroup]

So I'm just curious if you could comment on the thinking around around the February to two fifty?

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Yes. Thanks for the question, Yigal. Totally understand. I think as we've seen this business grow and the overall contraction that we see in the IBFC market writ large in the first quarter, We want to see the impact of that. Historically, if you look at IVSC scripts, they go down about 10%.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

We've not experienced that historically and that's probably more due to volume compared to the growth that we have now. So we really want to navigate that first before we give you anything that's any different than $240,000,000 to $250,000,000 Again, as Justin said in his comments and I think you've experienced our guidance in the past, we'll give you numbers that we're confident that we're going to hit.

[Yigal Nochomovitz, Director at Citigroup]

Okay, understood. And then on the $7.50 with EXPOSA, so can you just clarify, is this based on using 02/1933 Hatch Waxman '14 years from 2019 approval? Or is it based on an earlier date without Hatch Waxman just based on the core IP? Can you just clarify what timeline you're referencing there please?

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Yes, it includes the extension of that to last

[Mike Raab, President and Chief Executive Officer at Ardelyx]

month.

[Yigal Nochomovitz, Director at Citigroup]

Okay.

[Yigal Nochomovitz, Director at Citigroup]

All right. And then last one on the BD front, should we have an expectation that we could see some sort of licensing of a new product this year or that's to be determined?

[Mike Raab, President and Chief Executive Officer at Ardelyx]

That's to be determined. We're going to bring in the team that we built. We talked about Mike Oliver and the team that he's established and what they're looking at now. Certainly, our objective is to continue to build the pipeline and for the right opportunity if it's here this year we certainly would announce that.

[Yigal Nochomovitz, Director at Citigroup]

All right. Thanks so much.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Thanks, Paul.

[Operator]

And our next question comes from Dennis Ding of Jefferies.

[Dennis Ding, Vice President - Equity Research Analyst at Jefferies Financial Group]

Hi, good morning. Thanks for taking our questions. We have one on EXPOSA and another follow-up on Insuralis. So for EXPOSA, thanks for your comments in the prepared remarks. It's very encouraging to hear.

[Dennis Ding, Vice President - Equity Research Analyst at Jefferies Financial Group]

So we're seeing scripts potentially bottoming out, but curious what you're seeing real time in the field now that we're towards the February and if doctors are broadly prescribing EXFOZA in the same way as they did in 2024. I guess the key question is from a volume perspective, do you think we are at the bottom? And then I have a follow-up.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Sure. Just a brief comment from you and then I'll ask Eric to comment is the entire process management market is has been challenged disrupted as binders move into the bundle and how that operates within the DOs getting to the patients all those things. So we're working within that context, right? So think about that. And the message is Eric said in his comments that we're trying to enforce with physicians the directive that keep doing what you've been doing historically and we will adjudicate on our end all the issues that we're taking with coverage for Medicare patients.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Whether or not we're at the bottom, I think I certainly wouldn't be in a position to predict that. We feel really good about the performance. And I think Ameri can comment a little bit more on the sort of four areas that he's been tracking to ensure that that confidence continues.

[Eric Foster, CCO at Ardelyx]

Yes. Thanks, Dennis. I agree with Mike. I mean, I think it is too early to say whether or not we've been at the bottom. What I can say is, our message has certainly been well received with regards to access continuing for exposa for these patients.

[Eric Foster, CCO at Ardelyx]

And again, it was really important that we make sure that we were confident that the plan that we have and those four patient groups and pathways that they were being able to kind of flow through and receive access. And very early on, we saw that those four patient paths, they were successful and that patients were able to have access. So we're continuing to see that as we saw from the beginning part of this quarter and we just continue to be encouraged that we're continuing to see that flow through. As Mike said, there is a lot of activity right now with regards to the binders being in the bundles and the DOs having to work through that. So we're certainly empathetic to the challenges that they're going through and we just continue to remain focused on ourselves and making sure that physicians are confident that there continues to be access for EXFOZA and those patients out there in need can have access to it.

[Eric Foster, CCO at Ardelyx]

So we're encouraged by seeing that and we're just going to continue to push forward from there.

[Dennis Ding, Vice President - Equity Research Analyst at Jefferies Financial Group]

Okay, great. And then my follow-up on it's really a three parter, so I apologize for that. But you started two Phase II trials in Parkinson's and CF associated constant patient. Can you talk about the rationale behind those two very specific populations and if they are part of your $1,000,000,000 peak sales guidance or if these are incremental opportunities and perhaps help us size those markets for us? Thank you.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Sure. And those are investigator sponsored trials, which are certainly common in the industry. So those are not ones that we sponsor. And I think as you look at it, constipation is many different etiologies, Parkinson's being one that's common. And we're excited to see what those results will look like.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

And no, that's not part of the $1,000,000,000

[Dennis Ding, Vice President - Equity Research Analyst at Jefferies Financial Group]

Okay, perfect. Thanks so much.

[Operator]

Our next question comes from Laura Chico of Wedbush Securities.

[Laura Chico, Managing Director, Senior Biotechnology Analyst at Wedbush Securities]

Good morning. Thanks very much for taking the question. One on EXPOSA, and apologies if I missed this. Are there any quantitative metrics you could share just with respect to kind of the retention of patients now in 2025? And any possibility you can kind of frame context around the quantification of free drug in the quarter so far?

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Yes, I think to the latter question, it's too early for that, Laura. As people are going through this process that we described in our prepared remarks. I think I'll ask Eric to talk about sort of the first two groups of patients that came in from '24 into '25 and seeing that they're still on therapy. That's probably the only thing that we can comment on at this stage?

[Eric Foster, CCO at Ardelyx]

Yes. So as Mike said, we're not going to be able to get into specifics in terms of quantifying it, but I can confirm that we had patients that were on exposa in 2024 covered by Medicare Part D And as they came into 2025 and obviously we reverify their benefits, and they are able to qualify for our patient assistance program, they have been given access to EXPOSA. So those patients that were receiving it through Medicare Part D in 2024 now have access to our patient assistance program if they qualify and are continuing to have access in 2025. And then those patients that were receiving it through their commercial or their non Medicare benefit, again going through that reverification process in the January timeframe. If their coverage does continue, we've been able to confirm that they still continue to have access to expose it in 2025.

[Laura Chico, Managing Director, Senior Biotechnology Analyst at Wedbush Securities]

Okay. And then maybe just one for Justin and I think I missed this. With the SLR term loan draw, I think it was about $50,000,000 Where are the primary proceeds going to be applied as more for infrastructure, SGA expansion? Any other commentary there?

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

Sure. As you know, we've always been very prudent in our capital raising strategies. And so we had an opportunity with SLR Capital in October to add that $49,700,000 to our balance sheet to give us over $250,000,000 So we are very well resourced. It's at a very competitive interest rate. And so we want to take advantage of that as well as extend the runway of our interest only period until July of twenty twenty eight.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

So it's somewhat of a strategic move to give us plenty of opportunity to give Eric the ability to do what he needs to do to expand the team, to grow a business and to give our company the opportunity to build a pipeline, which we've touched on in the past, but we're going to be methodical and patient. But again, with a strong balance sheet now with plenty of runway, we have that flexibility to build a great company.

[Laura Chico, Managing Director, Senior Biotechnology Analyst at Wedbush Securities]

Thanks guys.

[Operator]

And our next question comes from Joseph Toney of TD Cowen.

[Joseph Thome, Analyst at Cowen]

Hi there. Good morning and thank you for taking my questions. Maybe on the first one, on EXPOSA, I guess just how familiar are the treating physicians with the bundling dynamics? I guess when we do our KOL call, some physicians are acutely aware of reimbursement dynamics and others seemingly aren't at all. They just kind of write the prescription that goes off.

[Joseph Thome, Analyst at Cowen]

So how often are you finding that you're having to correct physician behaviors and kind of remind them to just kind of keep doing things as normal? And then maybe second on the BDPs, what sort of assets are you looking for? You've had good progress with the prior authorization commercially with some of your assets. Would you look for a commercial agent or you want to expand out the development pipeline? Thank you.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Thanks for the question, Joe. Let me stress the second one first and I'll ask Eric to speak to what you just articulated in terms of the turmoil that we see out there is exactly what you pointed to. But But in terms of what we're looking at, obviously staying within our therapeutic areas is the first strategic consideration that Mike and the team are looking at. And whether the specific types that we're going to be looking at, I think, is premature to address that. We're going to look at something that makes sense within our team with the skill sets that we have across the organization and the commercial team, but building a broad and robust pipeline is the objective.

[Eric Foster, CCO at Ardelyx]

Yes. And then with regard to your first question, Joe, I think it's a good one. What we have learned is the vast majority of the physicians are aware of the bundle situation. But to your point, it's really the DOs that have absorbed that really have absorbed this as we moved into 2025. And for us, it really allows us to keep a very simple message to the physicians.

[Eric Foster, CCO at Ardelyx]

We know that they do not discern between Medicare or non Medicare or based on payer coverage. So for us, our message continues to be simple and straightforward as it was in 2024 that regardless of coverage that they can feel confident that they will have access to exposa and that's exactly what we're seeing in 2025.

[Joseph Thome, Analyst at Cowen]

Thank you.

[Operator]

And our next question comes from Roanna Ruiz of Leerink Partners.

[Roanna Ruiz, Senior Research Analyst at Leerink Partners]

Hey, good morning everyone. So quick one on EXFOZA. Given the new reimbursement dynamic, I was curious what factors could allow you to meet or even exceed the $750,000,000 peak sales guide for this product? And also wanted to know if you could elaborate a bit more on some of the strategies and resources you're using to make sure Medicare patients continue to stay on EXPOSA therapy if they qualify?

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Sure. I mean to the last part first is that is up to the physician, right? And the strong messaging that Eric has been talking about, keep doing what you're doing and the clear clinical benefit that EXPOSA therapy has demonstrated in helping patients reach their target levels, which previously many have not been able to do, but with EXPOSA they are. And in terms of the first part of your question, I'll ask Eric to address that.

[Eric Foster, CCO at Ardelyx]

Yes. So we as we think about for the patient's journey, we're very proud of our Adelix Assist team and the service that they're able to provide for physicians and for patients out there. And that's one of the reasons why we've decided to expand that to be more of a field facing team in 2025. So we think about the levers for us. Again, it's very simple messaging that we continue to have access regardless of payer coverage or patients continue to have access regardless of payer coverage.

[Eric Foster, CCO at Ardelyx]

We continue to make sure that we've got a solid marketing plan. We're out there with physicians. We're in the community, peer to peer programming, meeting them at conferences where we know that they like to receive information and they like to engage with the teams. And then again, the Ardellix Assist, to be able to work with the offices to help triage those patients as they work through their journey to be able to have access. And we're confident that that works and we're seeing a lot of traction there and the access is flowing through in 2025.

[Eric Foster, CCO at Ardelyx]

So that's what's really giving us the confidence that we'll be able to achieve that whether it's having access in the non Medicare segments and then also patients being able to qualify for our patient assistance program if they are Medicare patients.

[Roanna Ruiz, Senior Research Analyst at Leerink Partners]

Got it. And last one for me. I noticed you're getting solid traction with the recent IBZURALA field force expansion. Just thinking ahead, are there any triggers or milestones that might encourage you to do additional field force expansion either for IBZORELA or EXFOZA?

[Mike Raab, President and Chief Executive Officer at Ardelyx]

We always consider all opportunities to do deliver more and better to our patients. I think as Eric mentioned, increasing the access team with the field based access managers is a critical next step. Maybe you can talk a little bit more about that Eric for the pull through.

[Eric Foster, CCO at Ardelyx]

Yes. So and also just to recognize that we just completed at the end of Q3 the expansion. So we're still fairly early on in that expansion. Q4 was the first full quarter having the team there. So we still feel like there's plenty of opportunity based on the sizing that we have to get to the the one twenty four that's out in the field right now.

[Eric Foster, CCO at Ardelyx]

So we have plenty of opportunity there. And then for us, it's really about how do we pull through those patients and make sure that the teams are focused in the in terms of their core areas of responsibility. And really felt like we could do more with regards to the field access manager team. And so we're excited to be able to expand that team. It's taking place in Q1 and they will be out there in the field working with their ABD partners on the sales side starting in Q2.

[Eric Foster, CCO at Ardelyx]

So feeling very confident that we've got the right resources across the patient journey whether it's through driving clinical conviction, patient identification with the HCPs or pulling through those patients with the offices and the payer teams.

[Roanna Ruiz, Senior Research Analyst at Leerink Partners]

Got it. Thanks.

[Operator]

And our next question comes from Julian Harrison of BTIG.

[Julian Harrison, Managing Director at BTIG]

Hi, good morning. Congrats on the really strong quarter and for taking my questions. On EXPOSA, I'm wondering if you're able to share the approximate public versus private reimbursement split for the fourth quarter. Was it approximately sixtyforty or was it notably different than that? And then also curious if private payer access is where you want it to be for 2025 or maybe there's some near term opportunities to grow the coverage on that side?

[Julian Harrison, Managing Director at BTIG]

Thank you.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Thanks for the question. What I think is a confident number that we can say is a sixtyforty split between Medicare and non Medicare. The non Medicare is more than commercial rents Medicare, it's Medicaid commercial, TRICARE VA and Native American affairs. So that those are the five pillars of non Medicare. In terms of expanding access on the commercial side, remember, doing that we don't have rebates, we don't have discounts and that's why we've embraced the prior auth process.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

So any specificity around expanding that, it's certainly something that we would always consider, but don't see that as a strategy in the short term. And I reckon anything you'd add to that?

[Eric Foster, CCO at Ardelyx]

I would just say, I mean, to your point, following on from prior authorization standpoint, the PA approval rate is very high. And I think you can see that with the uptake that we had in 2024 and certainly reflects the innovation and really the real value that it provides to patients.

[Julian Harrison, Managing Director at BTIG]

Excellent. Thank you.

[Operator]

And our next question comes from Ryan Deschner of Raymond James.

[Ryan Deschner, Vice President - Equity Research at Raymond James Financial]

Good morning. I wanted to ask about what the level of

[Ryan Deschner, Vice President - Equity Research at Raymond James Financial]

promotion sensitivity for EXPOSA looks like compared to what you're seeing at INZRILLA at this point in the launch? And then I have a follow-up.

[Eric Foster, CCO at Ardelyx]

Sure, Eric. Yes, right now, I would say the team is very focused. We've not expanded the team. We feel like we've got the right number, still continue to focus on the same targets that we did in 2024 and continuing to get receptivity. As Mike mentioned, obviously a lot of activity in the market.

[Eric Foster, CCO at Ardelyx]

And so the team continues to be focused on working with nephrologists, obviously working with the dialysis organizations as well. And right now from a promotional sensitivity standpoint,

[Eric Foster, CCO at Ardelyx]

we feel like it's just as

[Eric Foster, CCO at Ardelyx]

it was in 2024 and we still have the same confidence that we had coming into the year.

[Ryan Deschner, Vice President - Equity Research at Raymond James Financial]

Got it. And then how are

[Ryan Deschner, Vice President - Equity Research at Raymond James Financial]

you thinking about expectations for gross to net further down the line at steady state for XFOZA now that you're four full quarters into the launch?

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

Thank you, Ryan. It's still relatively early as you might imagine the launch and with the payer dynamic change that we're seeing in 2025 and expect to see prospectively be truly to give precision. We try to give information when we have it. So as I said in my prepared remarks, we expect it to be less favorable in 2025 compared to 2024 because the Medicaid and commercial related discounts, if you will, are higher than Medicare. But we'll give more color as things progress.

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

It's just too early for us to give guidance.

[Ryan Deschner, Vice President - Equity Research at Raymond James Financial]

Got it. Thank you very much.

[Operator]

And our next question comes from Ed Arcey of H. C. Wainwright.

[Thomas Yip, Research Associate at H.C. Wainwright & Co., LLC]

Hello, good morning everyone. This is Thomas here asking a couple of questions for Ed. Thank you so much for taking our questions. So first question also on EXPOSA, just wonder if you can discuss the estimated bottom line impact of EXPOSA now being filled by transitional fantasy as well as the Epidemic Patient Assistance Program, perhaps as a worse percentage of net sales? And also will this be reflected in cost of goods sold starting in the first quarter?

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Yes. So I just I believe I understand your question. Transition pharmacy is the Ardellasys pharmacy. We have a closed distribution network with Xpos as compared to Xrella. So there's no change that is different with transition being the pharmacy with whom we work.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

So I wouldn't expect a change in that. I don't know Justin you can address that as well. But as Justin just said in the previous question, we do anticipate some change to gross to net due to the change in payer mix, which would be different that you will see going forward and will give you more clarity as things evolve. Justin, I think that

[Justin Renz, Chief Financial & Operations Officer at Ardelyx]

Just to reiterate what both Mike and Eric said earlier that our patient mix was approximately 60% Medicare, 40% non Medicare in 2024. And so that is again with patients losing Medicare Part D benefit coverage in 2025, that will be a change that we are working through in 2025, but still believe there's a significant population that we will build from. And then on the I believe you may be referring to the cost of our patient assistance program. So as a reminder, costs related to our patient assistance program do not run through cost of goods sold, but rather are part of our SG and A expenditures. And again, they're somewhat modest and that's been included in the guidance that we gave where we believe SG and A will increase approximately $10,000,000 per quarter over the course of 2025 compared to Q4 of twenty twenty four.

[Thomas Yip, Research Associate at H.C. Wainwright & Co., LLC]

Got it. And then perhaps one more question from us with Xrella. Based on your net sales guidance $240,000,000 in $2,025,000,000 dollars and you owe on a number of initiatives this year, what other programs, strategy do you have in place in all the reports in order to reach towards the $1,000,000,000 that sales goal?

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Sure. I'll ask Eric to comment a little bit more. But as he said in his prepared remarks, the omni channel efforts that we have underway, patient communication that is going to expand a number of other initiatives like that are part of the omni channel efforts.

[Eric Foster, CCO at Ardelyx]

Yes, I would as we come into twenty twenty five, one, we've got the continued expansion of the sales force, so we've got a full team in place there. The team, the marketing team has done a great job. We've had the evolution of the campaign in Q4 of last year and now continue to expand our patient initiatives and our patienting marketing efforts. This is a devastating disease for these patients and we need to continue to amplify the impact of the disease and the patient voice. We know we've got an engaged patient population and we want to meet them where they are to make sure that they feel empowered and confident when they run or when they get into the office.

[Eric Foster, CCO at Ardelyx]

And the marketing team is working very hard to really pull that through in 2025. And then from an access standpoint, we talked a bit about the field access managers. So again, as you think about that patient journey, really from coming into the physician's office, talking about their disease and the impact on their life and really raising their voice and being impactful with the physician to be able to get the right treatment for them. We feel that we've got the right insights and we've got the right strategy that we're going to be able to amplify that in 2025. And then again with the field access manager team to really help those patients be able to pull through so that they can continue to have access to Ipsrell.

[Thomas Yip, Research Associate at H.C. Wainwright & Co., LLC]

Understood. Thank you again for taking on the questions. Looking forward to looking at your 2025

[Thomas Yip, Research Associate at H.C. Wainwright & Co., LLC]

progress.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Thanks,

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Ed.

[Operator]

And our next question comes from Chris Raymond of Piper Sandler.

[Christopher Raymond, Sr. Research Analyst at Piper Sandler Companies]

Yes. Hey, thanks guys. Just on the commercial pay market for EXPOSA, I know it's early, but as you guys have done scenario planning with such a large segment in the market getting freed drug going forward, Have you thought about when you might start to see private payers coming back to you for more discounts, if at all? And ask maybe another way, I know Exposa already has a decent discount off of list price, but is there a point in time where maybe you'll feel comfortable that you won't see any more significant pricing pressure from the commercial market? Thanks.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Hey, Chris. Thanks for the question. We actually don't discount to payers. That's the whole decision that we made to embrace the prior authorization process. And if and when they come to us that means that we have come to their radar and generating sufficient revenue that we're they're going to ask us those questions.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

When or even if that happens, I think it's hard to predict. I don't know, Haric, any thoughts?

[Eric Foster, CCO at Ardelyx]

Yes. I would say our primary objective is access to EXPOSA. And in the current market, patients can have access. We're seeing that certainly on the commercial side and the other non Medicare segments. Should that change and should we start to engage in communications, again, our primary goal is access to EXPOSA and we will engage in those conversations and if we need to shift and pivot, then we certainly have the flexibility to do so.

[Eric Foster, CCO at Ardelyx]

But right now, we continue to see that the access is maintained in those non Medicare segments and we're going to continue to push forward.

[Christopher Raymond, Sr. Research Analyst at Piper Sandler Companies]

Thank you.

[Operator]

This concludes our question and answer session. I would like to turn the conference back over to President and CEO, Mike Raub for any closing remarks.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

Thank you all for joining us this morning. A special shout out goes to Tim Ardelix, who I know is listening. Your hard work is invaluable in bringing our essential medicines to patients and we wouldn't be where we are without you. I also want to acknowledge our shareholders for their support on this journey. We're building a significant company having successfully developed our medicines from initial concept through development and now into commercialization.

[Mike Raab, President and Chief Executive Officer at Ardelyx]

This achievement is not just noteworthy, it's a testament to our capabilities and we're excited to seize the opportunity and to do it again. With that, we can conclude the call. Thank you, operator.

[Operator]

This concludes today's conference call. Thank you for attending.

Participants

Executives

• Caitlin Lowie, Vice President, Corporate Communications and Investor Relations
• Mike Raab, President and Chief Executive Officer
• Eric Foster, CCO
• Justin Renz, Chief Financial & Operations Officer

Analysts

• Yigal Nochomovitz, Director at Citigroup
• Dennis Ding, Vice President - Equity Research Analyst at Jefferies Financial Group
• Laura Chico, Managing Director, Senior Biotechnology Analyst at Wedbush Securities
• Joseph Thome, Analyst at Cowen
• Roanna Ruiz, Senior Research Analyst at Leerink Partners
• Julian Harrison, Managing Director at BTIG
• Ryan Deschner, Vice President - Equity Research at Raymond James Financial
• Thomas Yip, Research Associate at H.C. Wainwright & Co., LLC
• Christopher Raymond, Sr. Research Analyst at Piper Sandler Companies